Europe and the International Monetary System

Abstract

In discussions of the international monetary system, the only unanimity is on the need for fundamental reform. Clearly, the agreement reached at the Smithsonian Institute in Washington in December 1971 only solved part of the problem: it was a temporary papering-over of the cracks, an interim solution pending the negotiation of a new overall settlement. Even before this new negotiation had begun, the Smithsonian agreement has already been called in question. Since June 1972 the pound sterling has been floating; and it was only after hard bargaining that European Ministers were able to announce their intention to abide by the Washington agreement.